Yesterday, a friend of mine announced the launch of 'Propps', which is some technology that allows people to make real offers on houses listed for sale on real estate agents websites. Importantly, it's 'not an app'.
The pitch is you add a white labelled 'Propps' button to relevant properties listed on your agencies site and that allows potential buyers to input their offer/purchase amount, choose a desired settlement time, disclose any conditions and finance, review documents, sign and transfer a deposit.
I flicked the link to a few friends both agents and non last night - insert biases!
The agents were like, "Oh another thing. Yeah I've heard that head office is talking to them. It wont work though. Maybe in the outer suburbs, but not in the city. Auctions are king!"
The tech bros were like, "Fuck. Yeah. Finally! I've been waiting for this/been thinking about it for ages. What value do agents even offer?! When will houses be NFT's!"
So I suspect we are going to land somewhere in the middle.
From the agents point of view, they will tell you that you should sell your house with them because they will be a hypeman at the auction and get you more than the commission they will charge you. Net positive!
From Propps point of view, agents are time poor, dealing with lots of half-interested time wasters and don't even add much value. So their service is going to give them loads of time back by moving the admin work of the sale to the buyer using their new technology.
Some things that seem important:
• Not every house that is listed on an agency website goes to auction. If the majority of your properties aren't, maybe this makes sense
• Real estate agencies, while branded as a family, are actually all individual businesses which pay ~$5k licensing fee per-year to the franchise owner. This also means that agency has their own tech stacks, systems and processors. So selling to 'Woodards', you're actually making 12 individual sales, not 1. It's not a game changer, but something to think about.
• Then there is the value question. What do agents actually do? Propps represents a challenge to their stranglehold on property sales. Do agents just refuse to use it because they are scared of what it represents? Agents often say that their real value is emotional support during the sales process: "This is most peoples largest financial transaction in their lives. They want to pay to have to have someone hold their hand." Well, that is on the sales side anyway. And Propps is focused on the buy side. But do I want to give you xx% commission for...setting up a Wordpress site?
What happens next?
Tech is going to eat property sales, right? IDK, but it feels like it. A big problem for agents is going to be marketing their properties and finding buyers. That is already a problem they 'solve' (pay platforms to solve), but when there is nothing else left to do, that's probably the thing they should do. Become really good social media influencers. Hire some insane growth people who study Zuck's algorithm and jam ads in my face. Drive that traffic to a Squarespace site and then let the traffic click the Propps button and make an offer. Job done. Where is my yacht?
What happens next, next?
I'm only half joking when I bring up NFT's. Last week someone paid USD$500k for a .gif in an auction. It's over. We've proven than people will spend major money in auctions online. Sure, it's crypto shit today, but how long until I'm buying some or all of a property in an online auction from my couch?